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The recent salary increases for new associates throughout the United States may be having a ripple effect across the Atlantic Ocean. New York’s Weil, Gotshal & Manges recently boosted pay for newly qualified lawyers in London from 75,000 to 90,000 British pounds, the equivalent of more than $179,000 in U.S. dollars at the current exchange rate. “We felt this year it was the right thing to do to be more in line with what we pay in the U.S.,” said Michael Francies, managing partner of the firm’s London office. Although they acknowledged that New York-level pay or higher is uncommon in London, several London-based partners said they would not be surprised if London’s new lawyers start pocketing more money soon, partly as a result of the recent increases to $160,000 for new associates in the United States. “I think some of the big U.S. firms that are behind this, I wouldn’t be surprised if they came out roughly where we are,” Francies said. Francies said several factors are considered in determining salary increases in London, with New York rates being one of them. The firm also examined the efficiency and productivity of the London office and the city’s overall legal market, he said. Francies also pointed out that direct comparisons between the two cities can be difficult because of different pay structures. For example, while bonuses are widespread in New York, they are discretionary in London, he said. And according to more than one partner, there is a perception in London that it is easier for English lawyers to become partners at U.K. firms than U.S. firms. Costs of living also vary. According to the Cost of Living Survey recently released by Mercer Human Resource Consulting, London is the second most expensive city in the world after Moscow, while New York ranks 15th. In order to embody their global images, many firms have been evening out their salaries across major cities, said Giles Rubens, a consultant with Hildebrandt International in London. “What you’re seeing is a degree of convergence, essentially because it’s an international market,” he said. “[Firms] recognize they need to move in that direction to have a global practice and that’s putting pressure on some of the U.K. firms who want to pay on competitive levels.” But while New York increases quickly spread to California, Massachusetts, Texas and other places, increases in London will probably not stretch beyond the city’s borders, Rubens said. The discrepancy between top-tier and second-tier firms in the United Kingdom tends to be larger than in the United States, he said. “There is a sense the U.S. market sort of leads the world and what happens in New York will sort of happen here tomorrow or the day after,” Rubens said. “But I think the impact will probably be among the very top firms . . . .On the purely domestic firms, it will have some trickle-down effect, but diluted.” Nick Root, a partner in the London office of Taylor Root, a leading legal recruiter, said salaries for newly qualified lawyers in London average about 46,000 pounds at U.K. firms, 65,000 pounds at the “Magic Circle” firms � London’s five or six leading firms � and between 80,000 and 85,000 pounds at U.S. firms. But it is not unusual for the major U.S. firms, such as Weil Gotshal, to pay more than 90,000 pounds, he said. American firms have always led the pay scale, but increases have been occurring across the board in London because of supply and demand, Root said in an e-mail message. “The supply for top finance/corporate lawyers simply doesn’t match the demand,” he said. Peter Finlay, senior partner in the London office of White & Case, said there is no pressure to raise the firm’s pay of 76,000 pounds for new lawyers in London to match Weil Gotshal’s 90,000 pounds. “Our biggest driver is what’s happening in the dynamics of the London market, because most of our people are trained with us or come to us from other large, primarily city firms,” he said. The increase to 76,000 pounds for the new class of lawyers is a 12.6% hike from the current pay of 67,500 pounds, according to White & Case. O’Melveny & Myers has raised salaries for new associates in the London office from 70,000 to 78,000 pounds, said Paul Loynes, a partner in the London office. Some firms’ London pay always matches that in New York. For example, Greg McCarthy, a spokesman for Latham & Watkins, said New York’s pay of $160,000 for new associates is converted into British pounds to figure London’s salaries. In the London office of Baker & McKenzie, newly qualified lawyers now receive about 60,000 pounds, but that will soon go up to 63,500 pounds, said Gary Senior, the office’s managing partner. While the London market is the most important one for setting local salaries, there is no denying the connection with New York, he said.

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